Archive for the ‘Mano-a-Mano’ Category

Matt 1, Art Cashin 0

Thursday, July 8th, 2010

On July 2, I wrote:

“And now, watch as I defeat Cashin, mano-a-mano.”

And now, I am victorious once again over another NYSE floor-trader. Art “Flash Crash” Cashin warned that the market was in danger of another Flash Crash due to mutual-fund redemptions. I took the other side of the trade, and said that such redemption washouts were great buying opportunities in the past.

What happened when the market reopened the following week?

BANG!

That’s what.

Or as the Wall Street Journal headline screamed: “Dow’s Surge: 452.51 Points in 3 Days“.

How do you like me now?

Matt 1, Madeline Schnapp 0

Monday, July 5th, 2010

Back on June 10th, I took Madeline Schnapp of TrimTabs to task for claiming that federal withholding-tax revenue had “suddenly started falling”.

Pure BS.

The data is now in, and any way you slice it, there was no decline whatsoever. As a matter of fact, withholding-tax revenue was robust:

Calendar May : $126.8 billion
Calendar June: $144.4 billion

That’s a 13.94% jump! And the year-over-year comparison for June was robust also.

What makes this even more impressive is that during this time the Census Bureau was winding down its massive workforce. On May 8th, the CB’s workforce was 585,729. Buy June 19th, it was more than chopped in half to 249,902.

So, while over a quarter of a million government jobs were being cut, withholding-tax revenue increased by 13.94%.

That is amazing.

And Schnapp couldn’t have made a dumber forecast.

TrimTabs predicted a loss of 200,000 jobs in June, and the private economy actually added 83,000. And that was more than double the 41,000 that it created in May. June was a very good month for the private-economy jobs market.

In summary, TrimTabs, which is partially owned by Goldman Sachs, got the withholding data completely wrong once again. And your only accurate, and honest, source for reporting on this vital data is still DailyJobsUpdate.com.

Note: There were two extra business days in June. However, even if you chop off the last two days of June, the total for the month comes to $134.9 billion – still a nice jump.

Matt 1, Grasso 0

Wednesday, June 30th, 2010

On June 15th, I took the other side of NYSE floor-trader Steve Grasso’s “quarter-end window dressing” call. Grasso said that the mutual funds were levitating the market and would keep it propped-up until the end of the month in order to dress-up Joe Sixpack’s quarterly statement.

Who won? I did. In fact, I crushed Grasso like a bug. Instead of levitating, the SPX plunged nearly 85 points! (click chart to enlarge. (that’s right, I made a chart.)):

How is it possible that some guy who never set foot upon a trading floor (me) could know so much more about the market than one of the “locals” who appears on TV as an expert? Well, I happen to track mutual-fund money flows on DailyJobsUpdate.com, and during June, the mutual funds themselves were reporting massive redemptions. They didn’t have any money to prop up the market.

Look at the “Domestic” line on the latest report from the mutual-fund industry organization, the ICI. Joe Sixpack pulled money out of his mutual fund during every week of May and June. That was the largest wave of redemptions since the TARP crash in September/October 2008.

Matt 1, Doug Kass 0

Saturday, June 21st, 2008

Last week, I posted my “No Bottom for XLF” piece where I correctly predicted that XLF’s March low would not hold. If you look in the comments of that post, you will see hedge-fund manager Doug Kass taking issue with my call.

The results? Kass, a star at RealMoney.com and on Kudlow, was crushed. As you are probably aware, XLF plunged through the March low, rallied back a bit on Friday, but still closed below the lowest print on March 17th.

Any other hedgies wanna come get some?

Here is another amusing anecdote: on Monday morning, after JPMorgan downgraded GE, Kass posted:

“Seems to me that as Grandma Koufax used to say, “Dougie, you can’t get killed falling off the curb!” And that phrase might apply to GE, which has been a non-participator in the market’s rally over the last few years.”

Well, there was another 5.8% of curb for GE to fall off of.

Note to Grandma Koufax: Don’t quit your day job!

P.S. I bet heavily on my analysis by shorting the XLF via SKF and made a huge profit.

Matt 1, Ken Heebner 0

Wednesday, June 18th, 2008

Ken Heebner was on Kudlow last night extolling the virtues of banks. As I have been printing money by shorting the financials, I didn’t realize that Heebner was on the other end of my trades. Will I out-perform one of the greatest investors ever this month? If he’s lugging a lot of banks, I probably will.

Apparently, a lot of the “smart money” have been buying banks lately. This reminds me of the smart-money buying home-builders back in 2006. It’s the same massacre all over again! How can banks make money with no real-estate market? Who would think that banks could thrive while home-builders suffer?

And today the situation is far more clear than it was back in 2006. After all, back then the economy was actually growing at a strong clip. So, maybe you could be excused for expecting the home-builders to rebound. But today? Is there any shred of fundamental evidence that points to better profits for banks?

Wayne Angel, a former Fed Head, also cut into Heebner on Kudlow. I was shocked out how the usually mild-mannered Angel pounced on Heebner as Heebner blamed inflation on global growth. Things got very testy.

Heebner was just saying that a rapidly growing global economy had gobbled up resources driving their prices higher. While many people call that “price inflation” it really has nothing to do with “monetary inflation” where a central bank prints too much money. So, Angel attacked Heebner over a perfectly innocent statement. For example, the price of oil is probably high due to real world supply-and-demand, and a weak dollar.

The big-money trade recently has been to short financials and buy oil. A lot of traders are trying to do the reverse of that, calling for a top in oil and a bottom in financials, and getting killed in the process. Heebner has a different take: he says buy oil and financials. So, he has, no doubt, been doing a bit better than the short-oil-long-banks crowd.

Since recessions kill inflation and the price of oil, I think it is only a matter of time before oil kills itself by choking the global economy. Will Chinese airlines keep flying as American airlines shut down? Are they magically immune to the price of oil? Maybe they can withstand the shock better, but I think that they put their pants on one leg at time just like we do.